Zinc Business. September 19, 2017 Dale Andres, Senior Vice President, Base Metals

Transcription

1 September 19, 2017 Dale Andres, Senior Vice President, Base Metals

2 Forward Looking Information Both these slides and the accompanying oral presentations contain certain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario) and comparable legislation in other provinces (collectively referred to as forward-looking statements). Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Teck to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements include management s expectations that Teck s zinc business has excellent growth and extension opportunities, mineral resource and mine life estimates, Red Dog 2017 guidance, projected Red Dog throughput and zinc grade, projection that the Red Dog VIP2 Project will increase mill throughput by approximately 15%, potential for mine life extension at Antamina, expectations of continuous improvement at Trail, the potential for future zinc development, including but not limited to regarding the Teena and San Nicolas properties, the expectations regarding potential life extension options and world-class new mine opportunities. These forward-looking statements involve numerous assumptions, risks and uncertainties and actual results may vary materially, which are described in Teck s public filings available on SEDAR ( and EDGAR ( In addition, the forward-looking statements in these slides and accompanying oral presentation are based on assumptions regarding, including, but not limited to, general business and economic conditions, assumptions regarding the receipt of regulatory and governmental approvals for our development projects and other operations, the accuracy of our resources estimates and the geological, operational and price assumptions on which these are based, conditions in financial markets, the future financial performance of the company, assumption that the VIP2 Project operates as anticipated, positive results from the studies on our expansion projects, our ongoing relations with our employees and business partners and joint venturers. Reserve and resource life estimates assume the mine life of longest lived resource in the relevant commodity is achieved, assumes production at planned rates and in some cases development of as yet undeveloped projects. Management s expectations of mine life are based on the current planned production rates and assume that all resources described in this presentation are developed. Certain forward-looking statements are based on assumptions disclosed in footnotes to the relevant slides. The foregoing list of assumptions is not exhaustive. Factors that may cause actual results to vary materially include, but are not limited to, inaccurate geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources), unanticipated operational or development difficulties union labour disputes, political risk, social unrest, changes in our credit ratings or the financial market in general, unanticipated increases in costs to construct our development projects, difficulty in obtaining permits, inability to address concerns regarding permits of environmental impact assessments, changes in tax benefits or tax rates, and changes or deterioration in general economic conditions. We will not achieve the maximum mine lives of our projects, or be able to mine all reserves at our projects, or develop our projects, if we do not obtain relevant permits for our operations. We assume no obligation to update forward-looking statements except as required under securities laws. Further information concerning assumptions, risks and uncertainties associated with these forward-looking statements and our business can be found in our most recent Annual Information Form, as well as subsequent filings of our management s discussion and analysis of quarterly results, all filed under our profile on SEDAR ( and on EDGAR ( The Red Dog and Antamina scientific and technical information disclosed in this presentation has been reviewed and approved by Rodrigo Marinho, P.Geo., Technical Director, Reserve Evaluation, Teck who is a qualified person under NI

3 Attractive Zinc Business World s largest net zinc miner World s second largest zinc mine at Red Dog Rising zinc production at Antamina Efficient, integrated smelting operation at Trail Increasing production and stability Excellent growth and extension opportunities Mill throughput increases Exploration and new development projects 3

4 Safety is a Core Value Frequency (per 200,000 hours worked) High Potential Incident Frequency YTD Our Key Focus Areas 1. High Potential Risk Control 2. Occupational Health & Hygiene 3. Courageous Safety Leadership Significant Improvement High Potential Incidents: 45% reduction Lost Time Injuries: 15% reduction 4

5 World s Largest Net Zinc Miner Top 10 Zinc Mines by Production (2016) Red Dog 1 Reserve Mine Life to 2031 Reserves: 51 Mt Resources: Indicated 6 Mt Inferred 26 Mt Zinc Production (kt) Antamina 1 Reserve Mine Life to 2028 Reserves: 247 Mt Resources: Measured 19 Mt Indicated 138 Mt Inferred 431 Mt 0 5 Source: Wood Mackenzie 1. Mineral Reserves and Resources as at December 31, 2016, as disclosed in our latest Annual Information Form available on SEDAR. 2. Our 22.5% share of Antamina zinc production was 45 kt.

6 Very Competitive Cost Position Low cost zinc production with significant quarterly variation at Red Dog Unit Costs (US$/lb) Q1 Q2 Q3 Q4 Seasonality of unit costs largely due to lead sales during the shipping season Zinc is a by-product credit at Antamina and accounted for in the Copper Business Unit By-product credits significantly reduce unit costs 6 1. Average quarterly unit cost ( ) before royalties, based on Teck s reported financials.

7 Stable Operating Costs at Red Dog US$/lb $0.60 $0.40 $0.20 $0.00 US$/lb $0.60 $0.40 $ Operating Costs Transportation Costs Treatment Charges By-Product Credits C1 Cash Costs Royalty Total Cash Costs 0.47 Low total cash costs, at US$0.45/lb in 2016 C1 cash costs down US$0.09/lb in 2016 vs Operating cost reductions Treatment charges lower Higher lead price Royalty costs are up as a function of higher zinc prices NANA royalty to 35% in October 2017 $0.00 Operating Costs Transportation Costs Treatment Charges By-Product Credits C1 Cash Costs Royalty Total Cash Costs 7 Based on Teck s reported financials.

8 Red Dog is a Consistent Performer 2017 guidance updated to kt zinc metal contained in concentrate 5 Throughput to Help Offset Grade Decline 20 Mine sequencing changes at Aqqaluk Additional feed of higher grade but complex Qanaiyaq ore Improvement and extension projects Throughput (Mt) Grade (%) VIP2 Project to increase mill throughput by ~15% Drilling program at Aktigiruq Throughput Zinc Grade 5 8

9 Preparing Red Dog for the Future Mine Life Extension - Near term Road access & drilling - Longer term - Underground development and new tailings facility Tailings & Water Management - Staged tailings dam construction - Major focus on water management and treatment VIP2 - Increase mill throughput - Maintain mine life - Lower cost structure Qanaiyaq - Started production in Optimizing blend strategy 9

10 Rising Zinc Production at Antamina Production (kt) Copper & Zinc Production Production (kt) Quarterly Zinc Production Zinc Copper - Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Large zinc production increase >50% in 2017 vs. the last 5 years Quarterly zinc production profile varies based on mine sequencing Mine life extension studies progressing 10 Guidance numbers are based on the mid-point of production guidance. Production numbers reflect Teck s 22.5% share.

11 Successful Drilling at Pend Oreille 11 High quality, local source of concentrate for Trail Operations Significant focus on drilling programs Improved feed grades in 2017 Additional drilling underway to improve 2018 mine plan confidence

12 Driving Continuous Improvement at Trail Annual production records set in 2016 Zinc: 312 kt Lead: 99 kt Silver: 24 Moz Red Dog is an important long term feed source Investing in second new acid plant Improved reliability and stability Margin improvement programs: Focus on cost management Improve efficiency Introduce value-added products % Compared with 2012 Base Solid Production Performance Zinc Lead 12 Guidance numbers are based on the mid-point of our production guidance ranges.

13 Innovation a Core Driver of Long-Term Value Manage Improve Grow Mine-to-mill initiatives including stockpile blending Blast movement monitoring Sensor-based ore sorting at Red Dog VIP2 Project Exploration and underground development Broad portfolio of existing, emerging & future technologies 13

14 Our Sustainability Strategy Community Water Our People Biodiversity Energy and Climate Change Air Community - Northwest Arctic Borough PILT Agreement at Red Dog Water - Trail groundwater treatment plant - Optimizing water discharge at Red Dog Air - Fugitive dust emission reductions at new Trail smelter recycle building 14

15 Significant Undeveloped Resource In Construction Pre-Sanction Medium-Term Growth Options Trail #2 Acid Plant Red Dog VIP2 Red Dog Satellite Deposits Antamina Brownfield Teena Future Options San Nicolás (Cu-Zn) Lens Tonnes (Mt) Zn (%) Cirque Pb (%) Zn+Pb (%) Main Lower Total Exploring to test continuity and resource limits, and preliminary development studies Rox Resources, June 1, 2016 PR Inferred Mineral Resource estimate in accordance to requirements and guidelines of the JORC code.

16 Near Term Development Potential In Construction Trail #2 Acid Plant Santa Barbara 500 km Pre-Sanction Red Dog VIP2 Pitarrilla Platosa Gulf of Mexico Medium-Term Growth Options Red Dog Satellite Deposits Antamina Brownfield Nuestra Senora Torreon Velardena Tayahua Teena Penasquito Future Options San Nicolás (Cu-Zn) Del Toro Fresnillo Charcas Resources 1 Tonnes (Mt) Cirque Zn (%) Cu (%) Indicated Inferred High grade, low C1 cost Cu-Zn mine Competitive capital cost EIA and permit submission for Q Top 10 zinc producer in early years Zn/Pb mine Zn mine Zn/Pb project Cu/Zn project Pb/Zn smelter Francisco I. Madero Cozamin Bilbao Real de Angeles 0 250km SAN NICOLAS San Luis Potosi La Negra Mineral Reserves and Resources as at December 31, 2016, as disclosed in our latest Annual Information Form available on SEDAR.

17 Increasing Value in the Zinc Business Low cost zinc production Driving results through operating excellence Targeted improvements to enhance value Life extension options at core assets World-class new mine opportunities 17

18 September 19, 2017 Dale Andres, Senior Vice President, Base Metals